In the northwest of Tokyo is an area of a dozen square blocks that wakes up at noon and parties till dawn, where gamblers and gangsters run rings around the police, where prostitutes and strippers undress for success, where curses and quarrels are in Chinese.
The area is Kabukicho, Japan's largest ''entertainment zone,'' as it is politely called, and these days it is a reflection of Japan's troubles in competing with China and other Asian countries.
For the same reasons that Nissan and Hitachi are in trouble -- high labor costs and inflexible management -- the bars and brothels of Kabukicho are passing into Chinese hands. Even the yakuza, the Japanese gangsters who see themselves as the toughest businessmen, are being driven out by shrewder and more ruthless Chinese gangs.
''Our biggest problem is the rise of the Chinese mafia,'' one yakuza lamented. ''The Chinese gangs are taking business from us in every area -- in prostitution, in gambling, in fencing stolen goods.''
''The difference between us is that Japanese yakuza think of long-term business relationships, but the Chinese mafia thinks just of the short term,'' he added, in a remark strangely reminiscent of what Japanese industrialists often say. ''Their only goal is money, money, money.''
Still bickering and distrustful because of the legacy of World War II, Japan and China compete for markets and influence around Asia. In the last half-dozen years, Japanese have become increasingly nervous about the possibility of being sidelined by the behemoth next door. Many Chinese and Japanese alike believe that Japan's dikes are crumbling and that in another decade there will be several times as many Chinese in Japan as today -- for this is where the money is to be made.
''None of us like Japanese men,'' said a 25-year-old woman from Shanghai who has worked as a prostitute for a year. ''They're so different from Chinese people. They're cold, and we're warm. I wouldn't choose them for pleasure.''
''But this is business,'' she added.
She has overcome the language barrier and prospered because, like many of the immigrants, she is well educated and fiercely ambitious. She takes classes in Japanese and English during the day, then goes to work in the hostess bar and nearby ''love hotels'' from 9 P.M. to 5 A.M.
''It's tough, but I'm making a lot more money than I did in China,'' she said. ''With the money, I hope I can go to the United States. I have some relatives in Florida, in a city called Miami.''
Despite extremely strict immigration rules for Chinese, their numbers in Japan are surging. The official figure for Chinese in Japan has risen to 252,000, from 95,000 a decade ago, and this does not include the tens of thousands who are here illegally.
Many of the Chinese are engineers, software designers and investment bankers, but those immigrants tend to live scattered around Tokyo and attract little attention. It is the thousands of gangsters and prostitutes clustered in Kabukicho who have become notorious, inflaming anxieties and hostility toward Chinese.
Despite Kabukicho's image as a Chinese enclave where gangsters hack each other with cleavers, it seems by American standards a surprisingly tame and safe area. It is the kind of red-light district that would have emerged from the paintbrush of Norman Rockwell. The streets are well lighted and spotless, pimps sometimes wear neckties and clean-cut barkers ask men to step inside, ''Please.''
''In spite of everything, Kabukicho is still a Japanese place,'' said Mark Schreiber, an American in Tokyo who has taken an interest in Kabukicho for more than 30 years and is researching a book on the area. ''In Southeast Asia, you might get knocked on the head, but you know it's not going to happen here -- because this is Japan.''
Only one killing in Kabukicho has occurred so far this year -- one Chinese man stabbed another in a karaoke parlor -- and graffiti and muggings are almost unknown.
''If you're honest, nobody bothers you in Kabukicho,'' said a Shanghai restaurateur who was lured to Japan by the money and says she has no troubles with the gangs. ''The hoods just feed off the hoods.''
Japan has had red-light districts since ancient times, long before there were red lights. Prostitution was made illegal only in the 1950's, and even now it is regarded by many as less felonious than jaywalking.
Originally Kabukicho was a purely Japanese-run area, but in the 1980's, Taiwanese steadily took over the bars and clubs in the area and began to bring in young women from China as ''hostesses.'' The Chinese invasion picked up speed in the 1990's, and Taiwanese or Chinese establishments replaced Japanese.
Now the grocery stores offer Shanghai newspapers and Chinese specialties like live eels. Some of Japan's best (and cheapest) Chinese restaurants are in Kabukicho, and families regularly stroll past the strip parlors for Cantonese noodles or Shanghai dumplings.
The collapse of the ''bubble economy'' hurt Japan's huge sex industry, and Government statistics say the number of sex-related businesses has fallen to 12,200, from 14,200 in 1989. But Chinese bars and brothels pay employees less and are able to thrive despite the recession.
''Here, if you work hard, you can make money and get ahead,'' said a 27-year-old doctor from Harbin, in northeastern China, a tall woman who has worked as a prostitute for only a few months. ''The Japanese complain about unemployment, but there's good money to be made here. You just have to be willing to work hard and take the tough jobs.''
''This is my way to get ahead in life,'' she added. ''I'll live the rest of my life here. Or maybe I'll go to the States.''
She and others said immigration restrictions are simply a minor inconvenience. Some of the women enter Japan as university students or after ''marrying'' a Japanese man in exchange for a few thousand dollars, while others sneak in by boat or use fake or stolen passports arranged by Chinese gangs.
Chinese in Kabukicho have also prospered by making a science of indulging their drunken Japanese customers.
''If a guest complains, immediately refund him his money,'' states Rule 29 on a four-page list that one Taiwan bar owner circulates among her prostitutes. ''If any girl gets three complaints, she must immediately resign.''
The list of rules, which is supposed to be confidential, stipulates that the women must smile and wear makeup at all times. Any woman caught chewing gum gets an $80 fine. Asking a customer for a tip is a firing offense, and a system of bonuses and penalties creates incentives for the prostitutes to fawn over the customers in the bar and in bed.
''When a customer sings karaoke, please, everyone clap,'' states Rule 37. ''This is compulsory.''
Chinese gangs prospered partly because they have been quicker than Japanese crooks to adopt high technology, like equipment to forge passports and make fake magnetic-strip cards that fool pachinko-game arcades and allow the user to play and win prizes. Chinese mobsters also won business by charging low prices --offering contract killings, for example, starting at just $2,700.
''The Chinese mafia is very, very good at business,'' the Japanese yakuza said. ''Whether in fake magnetic cards or fencing stolen goods, they go about things with a real system. They are very serious about making money.''
The yakuza complained that Chinese gangsters -- whom he referred to using a derogatory Japanese expression equivalent to ''dogs'' -- are multiplying wildly and are so brazen that they have taken to robbing Japanese mobsters at knifepoint or gunpoint.
''For Japanese yakuza, the most important thing is staying alive, and making money is second,'' the yakuza said. ''But for the Chinese gangsters, the first thing is money. The second thing is money. And the third thing is money.''
In December the police formed a special 101-member force to crack down on foreign crimes, especially in Kabukicho, but it seems to have made little headway.
''We know how the Japanese gangs work, because they've always been in Kabukicho,'' Taiichi Kawasaki, the head of the force, said in an interview in police headquarters. (The location of the Kabukicho office is a secret.) ''But it's difficult to figure out how the foreign gangs work.''
Few Chinese think that the crackdown on Kabukicho will succeed or will stem the tide of Chinese migrants, but even some of those engaged in shady businesses seem to welcome a greater police presence.
''The gangs are out of control,'' a Chinese pimp fretted as he stood on the street late one evening. ''They kidnap anybody who's Chinese and hold them until they get money, and sometimes they hurt them. If it's a girl, they rape her and take her bank card and force her to tell the PIN number. She's usually not legal, so she can't go to the cops.
''The Chinese community is living in fear.''
By NICHOLAS D. KRISTOF
Published: June 17, 1999